What has not been widely recognized is that the Ayatollah Khomeini's 1989 fatwa against Satanic Verses author Salman Rushdie introduced a new kind of jihad.

Instead of assaulting Western ships or buildings, Khomeini took aim at a fundamental Western freedom: freedom of speech.

In recent years, other Islamists have joined this crusade, seeking to undermine Western societies' basic liberties and extend sharia within those societies.

The cultural jihadists have enjoyed disturbing success....

Motivated variously, and doubtless sometimes simultaneously, by fear, misguided sympathy, and multicultural ideology — which teaches us to belittle our freedoms and to genuflect to non-Western cultures, however repressive — people at every level of Western society, but especially elites, have allowed concerns about what fundamentalist Muslims will feel, think, or do to influence their actions and expressions.

These Westerners have begun, in other words, to internalise the strictures of sharia, and thus implicitly to accept the deferential status of dhimmis — infidels living in Muslim societies....

The key question for Westerners is: Do we love our freedoms as much as the cultural jihadists hate them?

Many free people, alas, have become so accustomed to freedom, and to the comfortable position of not having to stand up for it, that they're incapable of defending it when it's imperilled — or even, in many cases, of recognising that it is imperilled.

The fashionable view is that the American economy is a busted flush, a hollowed-out, de-industrialised shell housed in decaying infrastructure that delivers McJobs and has survived courtesy only of a ramped-up housing market and the willingness of foreigners to hold trillions of dollars of American debts.

(But) of the world's top 100 universities, 37 are American. The country spends more proportionately on research and design, universities and software than any other, including Sweden and Japan. Of the world's top 50 companies ranked by R&D, 20 are American. Fifty-two of the world's top 100 brands are American. Half the world's new patents are registered by American companies.

This year, American exports have grown by 13 per cent, helped by the falling dollar, so that the US has reclaimed its position as the world's number one exporter. Moreover, and little remarked on, two-thirds of America's imports come from affiliates of American companies that determinedly keep most of the value added in the US. The US certainly has a trade deficit, but importantly it is largely with itself....

Despite its size, (China) has only three universities in the top 100, not one brand in the top 100, not one company in the world top 50 ranked by R&D and it registers virtually no patents.

China has no tradition of public argument, nor independent judiciary. India, a democracy with the right institutions, is much better placed — but with income per head 2 or 3 per cent of that in the US, a challenge will take centuries rather than decades.

It is the maligned EU that has the institutions and economic prowess to emerge as a genuine knowledge economy counterweight to America.

Anybody who would prefer China's communists needs to see their doctor. The greatest danger is that we start believing the pessimism. The United States is — and remains — formidable. Which is just as well for all of us.

The world is far more peaceful today than it was 15 years ago. There were 17 major civil wars — with "major" meaning the kind that kill more than a thousand people a year — going on at the end of the Cold War; by 2006, there were just five. During that period, the number of smaller conflicts also fell, from 33 to 27.

Despite this trend, there has been no drop in the number of wars in countries that produce oil. The main reason is that oil wealth often wreaks havoc on a country's economy and politics, makes it easier for insurgents to fund their rebellions, and aggravates ethnic grievances.

Today, with violence falling in general, oil-producing states make up a growing fraction of the world's conflict-ridden countries. They now host about a third of the world's civil wars, both large and small, up from one-fifth in 1992.

According to some, the US-led invasion of Iraq shows that oil breeds conflict between countries, but the more widespread problem is that it breeds conflict within them.

The number of oil-producer-based conflicts is likely to grow in the future as stratospheric prices of crude oil push more countries in the developing world to produce oil and gas.